Requirement 1: Explanation The company sold half of the Company B notes for $79,200. The total cost of the company B notes is $159,380; half of it is $79,690 ($159,380/2). The company sold it for $79,200, thus incurring a loss of $490. We debit the cash receipt and the incurred loss and credit the notes that have been sold. The purchase of bond X for $126,600 is journalized by crediting cash (reduction in assets) and debiting the bonds that have been purchased. The purchase of company Z notes for $267,900 is journalized by crediting cash (reduction in assets) and debiting the notes that have been purchased. The company sold all the Company A bonds for $515,000. The total cost of the company A bonds is $535,300, thus incurring a loss of $20,300. We debit the cash receipt and the incurred loss and credit the notes that have been sold. To prepare the 31 s t December adjusting entry we will have to see the total securities account for the company which is as below: Opening Closing AFS Securities Cost Fair Value Cost Fair Value Co. A Bonds $535,300 $490,000 $0 $0 Co... Requirement 2: To determine The reporting on 31 s t December Balance sheet consists of assets and liabilities that the firm owns on that particular date. The amount to be reported to the 31 s t December balance sheet for its long-term investments available for sale securities. Requirement 3: To determine The reporting on 31 s t December Income statement consists an account for all the expenses and gains that the company incurred during the entire fiscal year. All the gains from the sale of securities are reported as income in the income statement. The amount to be reported to the 31 s t December income statement pertaining to the gain or loss for its available for sale securities.

24th Edition

ISBN: 9781260158595

Author: Wild

Publisher: MCG

See similar textbooks

Videos

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 15, Problem 3APSA

Requirement 1:

To determine

Journalize the transaction:

Any financial transactions entered into by an organization are first entered into the journals via dual entry system to account for a debit and credit transaction. Double bookkeeping system envisages that each transaction has dual effect on company accounts and every transaction is recorded to account for these effects.

To journalize the entries for recording the transaction of Stoll Co.

Requirement 2:

To determine

The reporting on 31^s^t December Balance sheet consists of assets and liabilities that the firm owns on that particular date.

The amount to be reported to the 31^s^t December balance sheet for its long-term investments available for sale securities.

Requirement 3:

To determine

The reporting on 31^s^t December Income statement consists an account for all the expenses and gains that the company incurred during the entire fiscal year. All the gains from the sale of securities are reported as income in the income statement.

The amount to be reported to the 31^s^t December income statement pertaining to the gain or loss for its available for sale securities.

Expert Solution & Answer

Chapter 15 Solutions

Fundamental Accounting Principles

Ch. 15 - Prob. 1DQ Ch. 15 - Prob. 2DQ Ch. 15 - Prob. 3DQ Ch. 15 - Prob. 4DQ Ch. 15 - Prob. 5DQ Ch. 15 - Prob. 6DQ Ch. 15 - Prob. 7DQ Ch. 15 - Prob. 8DQ Ch. 15 - Prob. 9DQ Ch. 15 - Prob. 10DQ

Ch. 15 - Prob. 11DQ Ch. 15 - Prob. 12DQ Ch. 15 - Prob. 13DQ Ch. 15 - Prob. 14DQ Ch. 15 - Prob. 1QS Ch. 15 - Prob. 2QS Ch. 15 - Prob. 3QS Ch. 15 - Prob. 4QS Ch. 15 - QS 15-5 Reporting trading securities on financial...Ch. 15 - Prob. 6QS Ch. 15 - Prob. 7QS Ch. 15 - Prob. 8QS Ch. 15 - Prob. 9QS Ch. 15 - Prob. 10QS Ch. 15 - Prob. 11QS Ch. 15 - Prob. 12QS Ch. 15 - Prob. 13QS Ch. 15 - Prob. 14QS Ch. 15 - Prob. 15QS Ch. 15 - Prob. 16QS Ch. 15 - Prob. 17QS Ch. 15 - Prob. 18QS Ch. 15 - Prob. 1E Ch. 15 - Prob. 2E Ch. 15 - Prob. 3E Ch. 15 - Prob. 4E Ch. 15 - Prob. 5E Ch. 15 - Prob. 6E Ch. 15 - Prob. 7E Ch. 15 - Prob. 8E Ch. 15 - Prob. 9E Ch. 15 - Prob. 10E Ch. 15 - Prob. 11E Ch. 15 - Prob. 12E Ch. 15 - Prob. 13E Ch. 15 - Prob. 14E Ch. 15 - Prob. 15E Ch. 15 - Prob. 16E Ch. 15 - Prob. 17E Ch. 15 - Prob. 1APSA Ch. 15 - Prob. 2APSA Ch. 15 - Prob. 3APSA Ch. 15 - Prob. 4APSA Ch. 15 - Prob. 5APSA Ch. 15 - Prob. 6APSA Ch. 15 - Prob. 1BPSB Ch. 15 - Prob. 2BPSB Ch. 15 - Prob. 3BPSB Ch. 15 - Prob. 4BPSB Ch. 15 - Prob. 5BPSB Ch. 15 - Prob. 6BPSB Ch. 15 - SP 15 While reviewing the March 31, 2020, balance...Ch. 15 - Prob. 1GLP Ch. 15 - Prob. 2GLP Ch. 15 - Prob. 1AA Ch. 15 - Prob. 2AA Ch. 15 - Prob. 3AA Ch. 15 - Prob. 1BTN Ch. 15 - Prob. 2BTN Ch. 15 - Prob. 3BTN Ch. 15 - Prob. 4BTN Ch. 15 - Prob. 5BTN Ch. 15 - Prob. 6BTN

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Recommended textbooks for you

FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education